Entain’s CEE Divestment: Strong EBITDA Meets Product and Tax Limits in Poland

Entain is selling a 20% stake in Entain CEE back to EMMA Capital for around €425 million. The deal announced on 25 June marks the first instalment of a planned full exit from the joint venture that houses Poland’s STS and Croatia’s SuperSport. This comes four years after Entain paid roughly €690 million for 75% of SuperSport in 2022 and £750 million for STS in 2023.

The reversal stands out because the unit delivered £522 million in net gaming revenue in 2025. That figure rose 7% year-on-year with EBITDA at £183.7 million. Both brands retained their number-one market positions. As first reported by Reuters, UK tax increases are squeezing the broader group and forcing balance-sheet moves.

Strong Results Mask Strategic Pressures

Entain CEE generated that revenue and EBITDA while facing a 12% betting tax on stakes in Poland. The rate has stayed unchanged since the Gambling Act of 2009. CFO Rob Wood told analysts in Q1 2025 that Poland traded at a GGR margin in the 20s. By Q2 Wood said “The only place where we’re losing a little bit of market share at the moment is Poland,” blaming competitors’ “sacrificing profits”.

CEO Stella David called the transaction a decisive first step towards Entain fully exiting Entain CEE. She pointed to robust capital allocation discipline. The proceeds will cut debt and save an estimated £20 million a year in interest. Shares have fallen around 30% since the UK raised remote gaming duty from 21% to 40% and sports betting duty from 15% to 25%. The effective tax rate on UK profits will now exceed 80%.

Analyst Andrew Tam of Rothschild & Co Redburn calculated the CEE sale’s implied enterprise value at £1.83 billion at 9.3x EBITDA. He argued a leaner balance sheet would let investors properly value BetMGM as the main prize.

Poland’s Tax Regime Builds Discipline but Compresses Margins

Marek Plota, a Wrocław-based gambling lawyer at RM Legal, calls Poland a paradoxical market. The licensing model for sports betting works relatively well despite the unfavourable tax regime. The market has grown strongly since the 2017 reform with channelisation in betting estimated at around 78%.

Online casino tells a different story. Channelisation there remains significantly lower at around 61%. Plota notes the 12% tax on turnover compresses margins, limits pricing flexibility and forces licensed operators to be extremely disciplined in marketing, CRM and product development. Paradoxically this is one of the reasons why the Polish betting product has become so strong.

From the supplier side this kind of environment rewards operators who master back-office efficiency and customer retention tools. The same regime protects the status quo to some extent because incumbents have learned how to operate in it while many global operators stay deterred.

The Casino Liberalization That Never Materialized

Much of the original excitement around the STS acquisition rested on expectations that Poland would open online casino to private operators. That has not materialised. Dr Gabriele Stark-Lütke Schwienhorst, senior associate at CMS Law in Germany, says at the time of the transaction there was a strong belief that Poland could eventually move towards structural tax reform and possibly the opening of online casino to private operators.

This has not materialised so far and the legal constraints remain. Stark-Lütke Schwienhorst adds that this limits the type of synergies Entain can realise compared with more liberal European markets. Entain can support STS through technology, data, trading, CRM, operational discipline and group know-how but it cannot simply replicate a full multi-product sportsbook-plus-casino model in Poland. That is the core limitation.

The Polish betting market itself is not the problem. It has grown by around 20% year-on-year over the last several years with relatively strong betting channelisation. What it lacks is a regulated private-sector online casino framework.

Where the Competitive Risk Lies

Market estimates suggest that Betclic and behind it Superbet may already have dethroned STS or may be very close. They achieved this by obtaining licences, investing in product and marketing, and using capital for customer acquisition rather than paying an M&A premium. David insisted the business had refused to race to the bottom on bonusing and that Poland is a long-term attractive market through the rough patch.

Plota does not expect full liberalisation of online casino in the short term. Any reform will likely be driven by data showing that the state is losing tax revenue, regulatory control and player-protection oversight. Poland’s next election falls in autumn 2027. Any favourable legal change should be treated as a potential additional benefit, not as the base case.

Plota’s advice to buyers is to value Poland on the basis of the law as it exists today, not on the assumption that liberalisation is imminent. Investors should assume a demanding tax environment, no private online casino in the short term, strong competition and only gradual regulatory evolution.

The Capital Reality for Listed Operators

The existing put-and-call structure with EMMA Capital and the Juroszek family made CEE the easiest asset to move first. Entain’s stake falls from 67.5% to 47.5% with completion expected in Q4 2026. EMMA gains effective control.

This exit shows how even cash-generative businesses become fungible when home-market tax rates push effective levels above 80%. The Polish regime built STS into a disciplined leader yet the absence of casino access capped the upside that justified the original £750 million price. Operators must now weigh betting-only economics against the full product synergies available elsewhere.

The Entain CEE sale carries two lessons. London-quoted operators are treating even successful, cash-generative businesses as fungible sources of balance-sheet relief rather than face an 80%-plus marginal tax rate at home. Regulation cuts both ways: Poland’s tax regime built STS into a disciplined leader, but the absence of casino liberalisation also capped the very upside that justified paying £750 million for it. Entain calls itself “well positioned to be a long-term industry winner”. Investors will be watching whether that confidence survives the loss of one of its more consistent top performers.

Reporting: Why is Entain folding its winning hand in Poland and Croatia? (igamingbusiness.com)